Debt agencies hold out on Eskom

By SAMANTHA ENSLIN-PAYNE

Durban – Rating agencies Moody’s and Standard & Poor’s consider the government’s decision to lend Eskom R60 billion as a positive step but are maintaining their outlook on Eskom, which was downgraded recently, until further details are available.

Moody’s downgraded its outlook on Eskom last year while S&P last month placed the utility on credit watch with negative implications due to concerns over Eskom’s funding of new generating capacity and high primary fuel costs.

The finance minister, Trevor Manuel, said this week that the government would set aside R60 billion for Eskom, of which a third is likely to be used over the next three years. More…

Consumers turn retail tables

By Tom Robbins

Cape Town – The contrasting half-year performances of retailers Shoprite and Woolworths confirm a trend in the economy that upper-end consumers have cut back on spending the most, while those below them are still spending for now.

And this trend is translating into profit rises, and indeed profit falls.

Shoprite grew net profit by 48.2 percent to R675 million, while Woolworths fell 17.5 percent to R465 million,including a once off charge of R26 million.

Shoprite’s core Shoprite chain, which caters for a middle and lower market, grew sales 27.3 percent, while its small bottom-end Usave business surged at 44.1 percent. More…

Property sales cycle is adjusting to key changes

By Ethel Hazelhurst

If you are trying to sell a house for about R1.82 million, here’s a tip. Take your house off the market for a while. This advice comes not because there’s a conjunction of unfavourable stars working against you; it’s just that the market pendulum has swung against you. If you’re patient, it will return because pendulums always swing back.

John Loos, a property strategist at First National Bank, analyses the residential property market each quarter. His latest report shows that upper-income areas – “defined by estate agents as areas with an average house price of around R1.8 million” – are correcting after an overshoot. More…

Fees agreed for debt advisers

The National Credit Regulator (NCR) had agreed to guidelines proposed by the Debt Counsellors’ Association of SA to prevent the exploitation of people who wanted their debt restructured, the NCR said on Friday.  

The guidelines, which set maximum fees that debt counsellors could charge, were an interim measure pending the finalisation of the fee regulations by the department of trade and industry. – Sapa

2008 will test group’s resilience, says Absa

By Ray Faure

Johannesburg – Absa on Tuesday lifted diluted headline earnings per share by 17.4 percent from 1,121.3 cents to 1,316.1 cents for the 12 months to the end of December.

The group increased headline earnings by 19.6 percent to R9.413 billion, compared with headline earnings of R7.872 billion the previous year, with strong contributions from commercial and investment banking.

Headline earnings per share increased by 18.6 percent to 1, 401.9 cents per share.

A final dividend of 320 cents per share was declared, bringing the total dividend for the year to 560 cents per ordinary share. This is up 18.4 percent from the 473 cents per share declared in respect of the year ended 31 December 2006 and represents a dividend cover of 2.5 times. More…

Home sales lose their sizzle

Johannesburg – Residential market activity levels dropped in the final quarter of 2007, according to FNB’s Residential Property Confidence Indicator.

Jan Kleynhans, chief executive officer at FNB Home Loans said on Monday: “The residential property market continued to slow in fourth-quarter 2007. Despite a brief seasonal upswing in market activity, year-on-year trends indicate that the residential market is sluggish.”

FNB research indicated rising interest rates, inflationary pressures and the affect of the National Credit Act – which has now been in operation for eight months – continue to constraining the market.  More…

Chaos In India After Internet Outage

India’s internet is down

It has cost India half its bandwidth.and is hitting the country’s lucrative outsourcing industry.

The cables carry computer traffic from Europe.

Smaller firms which don’t have back-up systems have been the worst affected.

Many have said they will lose business if full internet access is not quickly restored.

The outage has raised questions about the system’s vulnerability.

One Gulf analyst called it a “wake-up call”. Another in London warned no one, including the West, was immune to such disruptions. More…

Rates knock down house price growth

Johannesburg – Growth in house prices as measured by the Lightstone National House Price Index have continued on a declining path, reaching 13.2 percent in September 2007, down from a year-on-year inflation rate of 17.0 percent in September 2006.

On a month-to-month basis, the inflation rate has remained relatively constant from the previous month (August 2007) at 1.0 percent. More…